Assessment Task 1 SITXFIN003

Assessment Task 1 – Questions and Answers

Performance objective
The student need to demonstrate performance outcomes, skills and knowledge required to take
responsibility for budget management where others may have developed the budget. It requires the
ability to interpret budgetary requirements, allocate resources, monitor actual income and expenditure,
and report on budgetary deviations.

Assessment description
In this assessment you need to answer all the questions satisfactorily.

Procedure
You are required to address all questions to achieve competence. Your trainer will provide you with
instructions for time frames and dates to complete this assessment.

Once completed, carefully read the responses you have provided and check for completeness. Your
trainer will provide you with feedback and the result you have achieved.

Submissions
You must submit:

o Answers to all the questions in the question section

Your assessor will be looking for:

 types of financial records:

o bank deposit documentation
o bank statements
o banking summaries
o business activity statements
o cheque books
o credit card transaction statements
o invoices
o journal entries
o labour and wages reports
o merchant statements
o merchant summaries
o transaction reports
 types of budgets:
o cash budgets
o cash flow budgets
o departmental budgets
o event budgets
o project budgets
o purchasing budgets

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Assessment Task 1 SITXFIN003

o sales budgets
o wage budgets
o whole of organisation budgets
 factors for consideration in the preparation of financial and statistical reports:
o cash flow
o commercial account activity
o commission earnings
o covers and financial return
o daily, weekly and monthly transactions
o expenditure
o income
o occupancy rates and financial return
o performance of department, project and/or products and services
o sales performance
o sales returns
o staff costs
o stock levels
o variance in income and/or expenditure
o wastage
o yield
 use, contents of and formats for:
o budgets
o financial reports
o statistical reports
 budget terminology
 specific industry sector and organisation:
o use of budgets to control costs and enhance profitability
o importance of budget control
o techniques for maximising budget performance
o financial reporting procedures and cycles
o features and functions of accounting software programs used to manage budgets.

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Questions: Answer the following questions below. All questions must be answered.
Question 1: List 6 examples for financial records

1. Labours and ages reports

2. Bank statements
3. Credit cards transaction statements
4. Business activity statements
5. Invoices
6. bank deposit documentation

Question 2: List 4 different types of budgets.

1. Department budgets
2. Cashflow budget
3. Wage budgets
4. Master budget

Question 3: What is the purpose of preparing a draft budget?

Help us to find any potential budgeting issues by collecting feedback from the staff member and also
prepare for setting expenditure and revenue targets for the next financial year.

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Question 4: What should you do with the feedback from the draft budget?

It is important to analyse the feedback and consult other if you are unsure as the relevance of the
change. Not all feedback incorporated into the final budget, after we consult, we also need approval
from the general manager, financial manager, and the owner as to its relevance

Question 5: List 2 people the final budget might need to be distributed to.

1. Department managers
2. Senior management
3.

Question 6: Why is it important for each department head to understand their part of the budget?

Each Department Head should understand their part of the budget and how it contributes to the overall
business. They should be informed of any changes made from the draft budget and be provided with
an explanation for the change that was requested to be changed wasn't

Question 7: Why should all staff have some knowledge of the budget for their area?

It can be motivating for them to understand what their sales target or expenditure limits are and why
they have been set. It will show them that up-selling and on-selling are important and encourage them
to make a positive contribution to the department's outcome.

Question 8: Once the final budget has been approved, how often should it be monitored?

Usually monthly (but may vary depending on individual circumstance of the business

Question 9: As well as receiving the final budget the management team should be advised of their
reporting duties. What should their report contain?

Management team are required to provide a report on their department for the month, commenting on
any budget variances as well as an overall picture of the running of the department.

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Question 10: Name 2 financial reports you might generate from your accounting system to check your
budget against actual income or expenditure.

1. Cash flow statement

2. Profit and loss statement

Question 11: Every revenue and expense item on the Profit and Loss Statement should be compared to
what?

The budgeted figure

Question 12: When revenue variances occur, why should you talk to the staff to help identify, and find
options to address the issue?

Often the staff on the front line will have more of an idea of the reasons for the variance and will be
able to give suggestion for improvement

Question 13: List 2 factors that can cause variances in staff budgets.

1. Extra demand requiring extra staff

2. Using too much casual labour
3.

Question 14: List 3 colleagues you may advise if you noticed that there were deviations between your
budget and your targets.

1. accountant
2. other department manager
3. staff

Question 15: List 2 ways you might research new approaches to managing your budget.

1.reviewing operating procedures

2. talking to existing suppliers

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Question 16: List 3 things you need to include in your budget report, to give the decision maker
enough information to do a clear cost versus benefit analysis of the budget request.

1. Overall benefit to the business

2. Explain the idea
3. Financial reports

Question 17: If you are cutting expenditure, why must you be careful that the cuts do not cause the
level of service and product to fall?

Any reduction in the level of service quality can impact in the long term viability of the business
Example:
Cutting the staff numbers can impact the performance of the daily task.

Question 18: Name an accounting program you can use to help manage budgets.

 Cashwiz
 MYOB
 Xero

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